New Delhi, Aug 17 - Prime Minister's economic advisory panel today pegged GDP growth for the current financial year at 6.7 per cent, painting a better picture of the economy than by other think-tanks.

It, however, added that inflation would remain high during the fiscal at 6.5-7 per cent, mainly due to poor monsoon which will pull down the agriculture growth rate to 0.5 per cent from 2.8 per cent last year.

"Economy will grow at 6.7 per cent in 2012-13," Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan said while releasing 'The Economic Outlook for 2012-13'. He earlier presented the report to Prime Minister Manmohan Singh.

Making a strong case for reforms, Rangarajan asked the government to open multi-brand retail to foreign investment and raise diesel prices in one or more steps to contain the subsidy bill.

He also recommended a curb on import of gold and improvement in regulatory regime to encourage investment in mutual funds and insurance.

Reserve Bank of India (RBI) had earlier lowered its growth projection for 2012-13 to 6.5 per cent from 7.3 per cent estimated earlier. The economic growth rate had plunged to nine-year low of 6.5 per cent in 2011-12. PTI